BoE asks financial firms for £24m more to keep track of risks from crypto assets

Levy increase needed to hire 100 extra staff in response to ‘new policy responsibilities’, says regulator body

The Bank of England is asking lenders and insurers to pay an extra £24m so it can hire 100 extra staff and keep track of new risks, including those linked to crypto assets.

The central bank’s Prudential Regulation Authority (PRA), which is in charge of managing systemic risks across the financial sector, said it was expanding its 1,341-strong workforce in response to “new policy responsibilities” that also included setting the UK’s own rules after Brexit.

Sam Woods, a deputy governor and head of the PRA, said the Bank was trying to keep up with “innovation and emerging risks” including the boom in crypto assets, which an international watchdog has said could pose a serious threat to financial stability if regulators failed to take action.

The Bank’s governor, Andrew Bailey, also urged banks and other financial firms in December to be “especially cautious” when dealing with crypto assets such as bitcoin until new regulations are in force.

“In order to deliver an expanded role as a rulemaker and an increased focus on operational resilience, we will need to increase our resources this year with a budget that will allow us to employ around 100 more staff than last year’s budget,” said Woods.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

He said the PRA also needed to monitor “ongoing digitalisation” of financial services, the use of artificial intelligence and machine learning, as well as other developments in fintech. “This includes our work to manage the risks to firms’ safety and soundness from climate change,” he added.

The PRA said its wider remit would require raising the annual levy for the 1,500 firms it supervises, as it planned to increase its annual budget by by about £24m to £320.9m, a 9% rise.

However, Woods said the regulator may struggle to attract candidates for its workforce expansion. Recent data showed a the UK unemployment rate fell to 3.9% in the three months to January, dropping below pre-pandemic levels for the first time.


Kalyeena Makortoff Banking correspondent

The GuardianTramp

Related Content

Article image
IMF says governments could set up their own cryptocurrencies
Christine Lagarde praises rebel technology as ‘safe, cheap, and potentially semi-anonymous’

Phillip Inman

14, Nov, 2018 @1:30 AM

Article image
Celsius Network: crypto firm reveals $1.2bn deficit in bankruptcy filing
Company says it was faced with ‘run on the bank’ amid ‘cryptopocalypse’ as investors raced to withdraw assets

Rob Davies

15, Jul, 2022 @2:56 PM

Article image
Crypto assets market ‘poses threat to global financial stability’
International watchdog highlights stablecoins as particular concern in absence of regulation

Jenn Selby

16, Feb, 2022 @5:54 PM

Article image
Mark Carney: internet-only lenders pose risk to UK financial system
Bank of England governor says fintech firms could trigger next financial crash without tighter regulation

Phillip Inman Economics correspondent

25, Jan, 2017 @6:24 PM

Article image
Why scrapping bonus cap could be a hard sell for Mark Carney
Bank’s worry about EU cap approach was justified, but don’t be surprised if nuanced reason for UK dropping it is lost on many

Nils Pratley

29, Nov, 2017 @7:05 PM

Article image
Facebook Libra must meet strict standards, warns Bank of England
Digital currency must be subject to measures such as stress tests to gain approval

Richard Partington

09, Oct, 2019 @5:29 PM

Article image
How the wheels came off Facebook's Libra project
Support for Mark Zuckerberg’s mission to reshape global finance is slipping away slowly but surely

Richard Partington Economics correspondent

18, Oct, 2019 @1:42 PM

Article image
Q&A: the collapse of terra and what it could mean beyond crypto
After the crash of the ‘stablecoin’ sparked panic, could the fall of the wider crypto market lead to a more permanent economic crunch?

Alex Hern and Dan Milmo

16, May, 2022 @5:09 PM

Article image
Cryptocurrency boom fails to stem losses at UK fintech firm Revolut
Losses almost double last year despite growing demand for crypto trading pushing up revenues 34%

Kalyeena Makortoff Banking correspondent

21, Jun, 2021 @10:53 AM

Article image
FCA warns over crypto assets pushed by stars such as Kim Kardashian West
US TV star posted paid advertisement for Ethereum Max cryptocurrency token on Instagram

Kalyeena Makortoff

06, Sep, 2021 @12:07 PM